Royal Bank of Scotland Group (RBS) is in talks with National Australia Bank (NAB) to sell Australasian assets of ABN Amro in a bid to shore-up its balance sheet after a raft of writedowns.

ABN's Australian and New Zealand assets, that RBS picked up in last year's e14.3 billion (£11.38 billion) deal, could be worth up to A$1.3 billion (£628.05 million).

NAB says a deal is "no certainty", but is believed to have been eyeing ABN's operations for at least two months.

The bank, Australia's biggest lender led by ex-Barclays deputy CEO John Stewart, also recently emerged as a potential bidder for HBOS's main Aussie asset BankWest after the credit crunch forced the British bank into a rethink its operations Down Under.

The BankWest sale could raise up to £3.7 billion.

ABN is ranked sixth in underwriting stock sales in Australia and New Zealand with a market share of about 8%. It advised on Australian deals valued at A$5.33 billion over the past year.

RBS led the ABN takeover just as the credit crisis began and since then has been forced into a series of writedowns and sales.

It raised £12 billion in a rights issue and last month secured another £3.6 billion from the sale of Angel Trains.

It also needs to raise new funds after absorbing writedowns of £5.9 billion. The bank suffered a blow yesterday when Financial Services, Switzerland's biggest insurer, pulled out of bidding for RBS's insurance unit.

Even before the credit crunch RBS had flagged the sale of the Aussie operations.

Deutsche Bank this month agreed to pay e709 million for the Dutch commercial-lending units Fortis, part of the RBS consortium, got in the ABN takeover. Fortis is also auctioning its stake in a Chinese fund manager that accompanied the ABN purchase.